Six men have pleaded guilty to a global software piracy scheme that netted $100 million in sales.
On Thursday, the United States Department of Justice announced that six defendants had admitted to illegally selling and distributing upwards of 170,000 key codes for Microsoft and Adobe products.
It is believed these codes were sold on Amazon, Overstock.com, eBay, Craigslist, and personal websites.
In total, investigators tracked $100 million in sales associated with this scheme, which includes an estimated $30 million in profits.
“It appears to be one the biggest software piracy cases, if not the biggest, the department has ever handled,” US Attorney Tammy Dickinson told WIRED. She went on to say that the men’s conviction will act as “a significant deterrent, in that it shows the Department of Justice and our partner agencies like Homeland Security have the technology and the ability to uncover these illegal schemes.”
The story began in 2013, notes the San Jose Mercury News, when authorities first learned that one of the defendants, Casey Lee Ross, of Kansas City, purchased 30,000 product key codes and other items that allowed access to copyrighted software products from sources in China, Singapore, and Germany.
Ross then sold those codes to four of the other defendants across the country, who in turn resold them online.
One of the resellers, Reza Davachi, 41, of Damascus, Maryland, paid $672,000 for product key codes and forged key cards from a counterfeiter in the People’s Republic of China.
Inverse writes that Davachi then set up a fake charitable organization called “Project Contact Africa” to illegally sell the items on eBay using PayPal. Overall, Davachi raked in $12 million, whereas PayPal and eBay were gipped of approximately one million dollars in lost fees.
The other defendants mainly resold the codes on their websites, though one did help a co-conspirators set up another company after his first business was sued by Adobe for copyright and trademark infringement, reports The Kansas City Star.
Though Microsoft and Adobe were cheated out of millions of dollars in this scheme – the items were purchased by Ross and his fraudsters below market value and were often used/re-activated several times – the tech giants did not suffer the most, as Tom Burt, Microsoft’s vice president and deputy general counsel explains:
“The real victims in these types of cases are consumers who may unknowingly purchase software online they think is legitimate, but instead end up being scammed by fraudsters into purchasing unlicensed software.”
Burt went on to add that consumers who purchase illegitimate software might ultimately be subjected to malware and spyware in the future.
Five of the defendants face up to five years in prison each, whereas the sixth co-conspirator faces just three years.
Clearly, this story is a warning to online users everywhere about the risks of software piracy. No one likes how expensive software can be, but that doesn’t necessarily mean you should rush in to buy the same product being resold for a suspiciously low price elsewhere. You don’t know what the reseller might have done to the software.
Ultimately, it’s better to just purchase the software from the actual sellers and avoid needlessly exposing yourself to risk.
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2 comments on “First comes piracy, then comes prison. Six men plead guilty to massive software fraud scheme”
Age old sage advice, if the offer appears to be too good, it usually is…
No-name resellers with unknown credibility or doubtful testimony are screaming trouble.
If feasible (or for personal use), opensource is the way to go. This of course, isn't conducive for all situations.
'whereas PayPal and eBay were gipped of approximately one million dollars in lost fees.'
Well that seems like something they would do so I don't have nearly as much sympathy as I would if they were innocent. PayPal should talk when it comes to theft and last I knew eBay are in cahoots with PayPal.
'She went on to say that the men's conviction will act as "a significant deterrent, in that it shows the Department of Justice and our partner agencies like Homeland Security have the technology and the ability to uncover these illegal schemes."'
No it won't. It will not act as a deterrent. The fact remains not everyone gets caught and even if many do (let's say if 95% were caught) it doesn't mean people won't do it. To claim otherwise is naive and stupid. This goes for all crimes (and this stupid claim happens a lot for various crimes). That's why after all this time software piracy is still happening. This is like serious penalties for bank robbery (or whatever else) have been handed down and they still happen. Better stated: crime happens regardless of the penalties. Whether it makes *some* reconsider it or not is possible but this will absolutely not be a 'significant deterrent'.
'Burt went on to add that consumers who purchase illegitimate software might ultimately be subjected to malware and spyware in the future.'
Then again, they might not. This is arguably a scare tactic. The fact is all operating systems are vulnerable to malware and frankly it doesn't matter if it was pirated or not (though it is true that sometimes pirated software might be infected with some malware so has software bought legally – and the risk remains after buying).
'Ultimately, it's better to just purchase the software from the actual sellers and avoid needlessly exposing yourself to risk.'
Or crack it yourself (manually). Not that I would have any experience in that or recommend it … (I don't recommend it anyway but in my case I don't use commercial software so the former is a moot point). Yes, I agree. You're better off buying software if there is no other alternative that will meet requirements (that is cheaper or free). It is unfortunate that a lot of software is bloody expensive but that isn't going to change in the commercial world – and piracy arguably increases the cost.